faa center of excellence emerging trends in air …acgsc.org/meetings/meeting_96/subcommitte...

1CENTER FOR AIR TRANSPORTATION SYSTEMS RESEARCHCENTER FOR AIR TRANSPORTATION SYSTEMS RESEARCH

Education, Analysis and Research for the Next FrontierEducation, Analysis and Research for the Next Frontier

A member of

FAA Center of Excellence

Emerging Trends in Air Transportation:

Challenges & Opportunities for Guidance & Control Research

Lance Sherry (Ph.D.)George Donohue (Ph.D.)

Bengi Mezhepoglu, Danyi Wang, Jonathan Drexler (Ph.D. Candidates)

2

Acknowledgements

• Dave Knorr, Anne Yablonski, Tony Dziepak (FAA)

• Terry Thompson (Metron Aviation)• Dan Goldner (Ventana Systems)• JP Clarke (MIT), Mike Ball (UMd), Toni

Trani (VT), Mark Hansen (UC-Berkley)• David Schaar (GMU)• C.H. Chen, Don Gross Sasha Klein, John

Shortle (GMU)

3

CENTER FOR CENTER FOR AIR TRANSPORTATION SYSTEMS AIR TRANSPORTATION SYSTEMS

RESEARCHRESEARCHEducation, Research & Analysis for the Next FrontierEducation, Research & Analysis for the Next Frontier

School of Information Technology & Engineering

STRATEGIC PLANNING/

INDUSTRY ANALYSIS

• Industry Dynamical System Models

••Cost/Benefit Analysis

• Airline Revenue Management

• Airline IT/Enterprise Architecture Design

AIRPORT & AIRSPACE SIMULATION

• Airport & Airspace System Performance Analysis

•Airspace Design

•Stochastic Analysis & Simulation

•

•Passenger & Baggage Flow Simulations•Airport Security

SYSTEM/SAFETY ANALYSIS

• Probabilistic Risk Assessment

• Safety Monitoring System Design

• Probabilistic Wake Vortex Models

An FAA Center of Excellence

EDUCATION

•Degree programs (Ph.D., M.Sc., B.Sc.) with concentrations and courses in Air Transportation.

•Continuing Education

•Seminars & Short-courses

•Co-ops with Industry Partners

Systems Engineering and Operations

Research Department

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Summary• U.S. Domestic Air Transportation System (ATS)

is an amazing success story over last century– Economic engine of U.S. economy

• Sustainability of growth in question– Demand approaching Capacity of sub-systems

(delays, cancellations, excess costs, salaries, staffing)

– Scarce resource not being managed• Dynamical System Model of ATS demonstrates

that Technology alone, cannot solve problem– Systemic industry structure must be modified to

included close-loop feedback to:• Manage fluctuations in demand in efficient manner• Incentivize adaptation and innovation

5

Organization

1. Air Transportation System (ATS)– Success and Sustainability?

2. Analysis of ATS• Dynamical System Model

3. Opportunities for Research



A member of


Air Transportation System

7

Air Transportation & Economy• Air Transportation is a major determinant of the

nations economic health– Growth in U.S. GDP corresponds to growth in air

transportation• Air Transportation is an “intermediate good”

• Air transportation used to achieve other purpose• Direct Contributions:

– Air transportation directly contributes 1-2% to GDP– Employment, Airport economies

• Indirect Contributions: – supply chain, equipment suppliers

• Induced Contributions:– Hotels, rental cars, …

8

Success Story – CapacityATS Capacity

0

100000

200000

300000

400000

500000

600000

700000

800000

Years

Domestic Enplanements Domestic RPMs (Millions) Domestic ASMs (Millions)

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Success Story - Airfares

Source: ATA (2005) Yield = Before Tax Revenue per Seat-Mile

Domestic Real Yield (1978 Cents)

05

101520253035404550

1920 1940 1960 1980 2000 2020

Year

1978

Cen

ts

Jets

Widebodies

Hub-&-Spoke

Yield Mgmt

Internet, LCCs

10

Sustainability ?1. Airline Profit/Loss Cycles

– Finding economic equilibrium?2. Eroding access from small communities

– Essential Air Service subsidies growing?3. Congestion at hubs:

– delays and cancellations– Go-arounds/Wake Vortex encounters

4. Environmental issues (emmissions, noise)5. Airport & Airspace Trust Fund eroding6. Airport & Airspace innovation cycle is dormant7. ATC innovation cycle is dormant

– Modernization efforts effectively stalled8. ATC labor issues (salary, staffing)

11

Sustainability ? – Airline FinancesAirline Finances

-20,000,000

-15,000,000

-10,000,000

-5,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

Cum

Net

Pro

ft/L

oss

& O

pera

ting

Prof

t ($)

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

Ann

ual R

even

ues

Cum Net Profit/Loss Annual Operating Profit ($K) Operating Revenues ($K)

Source: ATA (2005) Symptom, not a cause

12

Sustainability ? - CongestionT OTA L SC HED U LED OPER A TION S A N D C U R R EN T OPT IM U M R A TE B OU N D A R IES

0

4

8

12

16

20

24

28

32

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Schedule Facility Est. M odel Est.

• 1 Arrival Runway• 1 Departure Runway• 45 Arrivals/Hr (Max)• 80 Seconds Between Arrivals• 11.3 minute Average Delay• 77 Delays/1000 Operations• 40 min./Delay

0

10

20

30

40

50

60

0 10 20 30 40 50 60

Departures per Hour

Arriv

als

per H

our

ASPM - April 2000 - Instrument ApproachesASPM - October 2000 - Instrument ApproachesCalculated IMC CapacityReduced Rate (LGA)

32,32

13

Sustainability ? – A&ATF

Source: ATA (2005) Shift to RJs, results in more ATC operations, A&TFless revenue

Airport & Airway Trust Fund

-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$M

Expenses Income Balance Ticket Tax Income

14

Sustainability ? – ATC Labor

ATSC Hiring

0

5,000

10,000

15,000

20,000

25,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Year

# AT

SC

Shortfall in Certified ATCS

ATSC in Excess of

Target Level of Staffing on

Payroll

# Candidate + Developmental + Certified ATCS on Payroll

# Certified ATCS

FAA-NATCA Target Staffing Level

# Developmental ATCS#ATCS Attrition

= #ATCS Hired

15

Sustainability ?

• Throwing $ and Technologies at the problem does not appear to be solving the problem

• What is the systemic structure of the industry?– Can this knowledge explain behavior?– Can this knowledge focus R&D?



A member of


Analysis

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Dynamical System Models

Control Law:Price Setting

Plant: Consumer Demand

Value of Substitute Service/Product

Supply of Service/Product

+ +

--

Demand for Service Product

Plant exhibits non-linear dynamics (price elasticity)

Market ForcesMarket Forces

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Social Factors

Revenue Passenger Miles

Price of Substitute forms of transportation

GDP

Latent Demand by Pax & Cargo for Air

Transportation

Load Factor

Relative Value of Air Transportation Service

Airfares

Network Integrity

Airport & Airspace Capacity (Slots)

Price of Substitute forms of Airports & Airspace

Inter-airline competition

Latent Demand by Airlines for Airports &

Airspace Slots

Airports & Airspace Utilization (Flights/Airport &

Airspace)

Relative Value of Air Airports & Airspace

Service

Usage fees

Available Seat Miles (O/D pairs, Frequency,

Size of Aircraft)

Slots

Congestion, Delays, Cancellations

Precursors to incidents/ accidents

Accidents

Disproportionate media coverage

Pax & Cargo Demand Regulated by

Distorted Market-based Mechanism (-

R/B)

Demand for Airports & Airspace NOT Regulated by Any Mechanism (-R)

Airline operating costs

Latent Demand by FAA-ATO for Air Traffic Control Resources

Productivity (Slots/Resource)

Price of Substitute forms Air Traffic Control

Relative Value of Air Traffic ControlDemand for Airport &

Airspace Resources NOT Regulated by Any Mechanism (-R)

Capacity of Air Traffic Control Resource

Passenger & Cargo

Airline Service(Origin/Destination Pairs, Frequency, Size of Aircraft)

Airspace & Airports (Navigational Capabilities, Airways, Cruise Flight Levels, Departure/Arrival Runway Slots, Gates)

Air Traffic Management & Control Resources(Arrival/Departure Rates, Separation, VFR Rates in IFR, …)

Bankruptcy Protection

Airline Business Models

Price of Air Traffic Control Resource

FAA-NATCA Contract

19

Air Transportation System• Air Transportation System is provided by layers of

networks:1. Passengers & Cargo

• Purchase tickets for air transportation based on relative merit over other forms of transportation

• Passenger & cargo transportation drives modern economy2. Airlines

• Provide capacity for air transportation of passengers by providing Scheduled Flights (routes, frequency and aircraft)

3. Airspace & Airports• Provide capacity for Airline Scheduled Flights through airways,

navigational aids, flightlevels, runways, gates, …etc.4. Air Traffic Management & Control

• Provide capacity for Airports and Airspace by managing and controlling traffic in the presence of weather using procedures,sensors

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Air Transportation System

• Passengers and Cargo rely on Airlines to provide air transportation

• Airlines rely on Airspace & Airports to provide routes, runways, gates

• Airspace & Airports rely on Air Traffic Management & Control to maximize their use in the presence of weather and other variables

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(1) Consumers: Pax & Cargo• Air Transportation

advantageous over other modes:– speed, cost (grows with trip

length)• Demand exhibits Variability

– Seasonality, Day of week, Hour of day

– Income Elasticity (Engels Law)• As income rises, people

spend proportionately more on luxuries (and not on necessities)

– Price Elasticity• Sensitivity of demand to price • Tourist elasticity > Business

elasticityAIR TRANSPORTATION SYSTEM

Air Transportation Consumers:Passengers & Cargo

GDP, Social Factors, Value

Dem

and

22

(2) Airlines• Air Transportation Service:

– Seats• Network of routes• Schedules on each route (i.e.

frequency of service)• Gauge of service (i.e. aircraft

size, fleet)• Subject to variability from:

– Pax & Cargo demand Prices of competing modes

– Prices determined by competition

– Supply Chain price (e.g. Fuel)– Technology (speed, costs of

operation)– Supply of resources (e.g.

gates, aircraft)

AIR TRANSPORTATION SYSTEM



Dem

andSupp

ly

Air Transportation Service Providers:

Airlines

Competition, Slots,

Network Integrity,

Bankruptcy Rules,

Business Models,

Essential Air Service

Dem

and

23

(2) Airlines

• Airline’s product– Undifferentiated– Perishable– Subject to shifts in demand (can be sudden)

• Airline’s marketplace– Subject to Ease-of-entry

• Existing airline into new O/D market– Tendency to Monopoly or Oligolpoly

• Tendency to gradual elimination of competitors• Airline economics

– Capital-intensive vs labor intensive• Larger, faster aircraft more capital intensive• High-debt/equity ratios

– Bad position during recessions• Sensitive to business cycles

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(2) Airlines

• Airlines largely decoupled from infrastructure– Exception: Hubbed operations highly dependent on

hub airport (geography, capacity)• Post-deregulation

– High degree of flexibility in network, frequency of service, airfares

• Hyper-competitive due to low barriers to entry– “Price-wars” good for consumers– Tends towards oligopoly on specific routes (hubs)

25

(3) Airports & Airspace• Infrastructure Service Provider:

– Intersection with other modes of transportation at Origin/Destination

• Gates, runways, navigational services

– Routes and Crz FLs• SIDs, STARs, airways, …

• Safety critical– Operates in highly regulated

environment• Subject to variability from:

– Environment– Demographics– Weather




DS


Airlines

Competition, Slots,

Network Integrity,

Bankruptcy Rules,

Business Models,


Infrastructure Service Providers:Airports and Airspace

Environment, Demographics

Dem

andSupp

ly

Dem

and

26

(4) Air Traffic Management & Control

• Flow Service Provider:– Sequencing and separation in

Airspace & Airports• Coordinated by procedures• Performed manually today

• Involves:– Airline Operations Centers

(AOCs)– Traffic Flow Management

(TFM)– Centers, TRACONs, Towers

• Operational management of negative externalities– Congestion– accident prevention– Subject to variation due to

weather AIR TRANSPORTATION SYSTEM



DS


Airlines

Competition, Slots,

Network Integrity,

Bankruptcy Rules,

Business Models,


Infrastructure Service Providers:Airports and Airspace

Environment, Demographics

DS

Traffic Flow Service Providers:Air Traffic Control (TFM, AOCs,

ARTCCs, TRACONs, Towers)

Weather,Budgets,

Labor, Union Contract,

Technology

DS

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(4) Air Traffic Management & Control

• ATC operated at sector level– Sector is airspace controlled by ATC Specialist (ATCS)– Sector size determined by traffic demand and common routes

• Human operator ability to manage traffic (12 – 20 aircraft per 15 minutes)• Traffic Flow Management (TFM):

– Manages traffic flow at Center Level (10 – 20 sectors)– Maintain aircraft count within legal threshold of ATC human workload

and safe separation– Systematic forecast of traffic patterns that lead to overload prohibitive

(Menon, Sweriduk, Bilimoria, 2004; Robelin, Sun, Wu, Bayen, 2005)– Decision-making based on uncertain information

• Airline Operations Centers– Airlines choose TFM options to maximize own-company objective

function

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Plant Dynamics – Inverted Pendulum

• Changes in Pax demand – τ = Weeks to Months

• Changes in Airlines supply– Routes, Frequency, Guage

• τ = Weeks to 3 -6 Months– Increased Fleet

• τ = 3 years• Changes in A&A supply

– Sector changes• τ = 3 – 6 months

– Runways, gates, routes, CrzFLs

• τ = 10 – 30 years• Changes in ATM&C

– Staffing, Sectors– τ = 7 – 10 years AIR TRANSPORTATION SYSTEM


D

S

Infrastructure Service Providers:

Airports and Airspace

Air Transportation Service

Providers:Airlines

D

S

Traffic Flow Service Providers:Air Traffic Control (TFM, AOCs,

ARTCCs, TRACONs, Towers)

D

S

Equilibrium

29

Closing-the-Loop

• Methods for balancing Demand and Supply for “Networked Industries “(Coase, 1988)1. Competitive mechanisms2. Market-based institutions

– Market equilibrium through pricing (rapid and efficient)– Automatically manages for scarce resources– Subject to market-failure through monopolies, oligolopolies

3. Private agreements4. Public regulation

– Market equilibrium through regulation (slow and inefficient)– Slow or no response to scarce resources– Subject to political consideration

5. Collaborative Decision Making– Voluntary (limited by collusion concerns)

30

Methods for Balancing Demand/Supply

• Market-based mechanisms– Price of service set based on cost and

demand• When demand << capacity, price is based on cost• When demand > capacity, price is based on

demand for scarce resource– efficient (fast and equitable)– Must be protected against anti-competitive

forces that lead to monopolies/oligopolies

31

Methods for Balancing Demand/Supply

• Public Regulation– Price of service set based on cost of service

• Excise Taxes • Airport & Airway Trust Fund

– Ticket Taxes– Fuel Taxes

• Airport– Landing fees, security fees

– Slow and inefficient (political)– Results in cross-subsidies– Emphasis on equity

• Does not account for scarce resources

32

ExcessDemand

ExcessSupply

Air Transportation Consumers:

Passengers & Cargo

DemandSupply

Balancing Mechanism(airfares, subsidies)

Infrastructure Service

Providers:Airports and

Airspace

Traffic Flow Service Providers:

Air Traffic Control (TFM,

AOCs, ARTCCs, TRACONs,

Towers)DemandSupply

Balancing Mechanism(staffing, salaries, budgets)

Air Transportation

Service Providers:

Airlines

Demand

Balancing Mechanism

(landing fees, ticket tax, admin measures)



Competition, Slots, Network Integrity, Bankruptcy Rules, Business Models,


Weather, Environment

Budgets, Labor, Union Contract, Technology

Air Trans. Service Providers: Airlines

Supply

Infrastruct. Service Providers:

Airports & Airspace

33

Closing-the-Loop in ATS(A) Pax/Cargo v. Airline Schedule

– Market-based: Airfare– Administrative: Essential Air Service Subsidies

(B) Airline Schedule v. Airports & Airspace– Market-based: Landing fees, Ticket Taxes, Fuel

Taxes• Does not adjust for scarce resources

– Administrative: Admin Measures (slots, uni-laterals), FAA F&E budget

(C) Airport & Airspace v. Air Traffic Management & Control– Administrative: Salaries, FAA Ops Budget

• Does not adjust for scarce resources

34

(A) Pax & Cargo v. Airline Schedule

• Balancing mechanism - airfares• Airfares distorted by:

– Inter-airline competition for marketshare– Slot-ownership (use-it or lose-it)– Bankruptcy protection– Network integrity

• Cumulative profits over network (feeders)

35

(B) Airline Schedules v. Airports & Airspace

• Airports & Airspace capacity limited only at congested network nodes/arcs (e.g. LGA, ORD)

• Airline demand for scheduled flights is NOT balanced with congested Airspace & Airport Capacity by any mechanism

• User-fees in the form of ticket-taxes, security taxes, and landing fees – intended to cover estimated costs only– do not take into account scarcity of resources– Set by political means– serve no purpose to regulate demand within the limits of capacity

• Administrative Measures– Airport capacity limits and slots

• Favor incumbent airlines

36

(B) Airline Schedule v. Airports & Airspace

• Absence of “value” of “scarce” airspace & airport resources prevents application of commodity cycle– Airlines account for internal costs (not external)

• Problem: Property rights non-existent• Except Slot controlled airports (e.g. LGA, DCA)

– Rule dependent– Some secondary market trading– Inefficient (use-it or lose-it rules)

• Value can only be assessed by consumer of resource airlines– Requires market-place

37

(C) Airspace & Airports v. ATM&C

• Airspace & Airports demand for Air Traffic Management and Control is NOT regulated by any mechanism

• Problems:– ATM&C Labor intensive process (ATCSs)

• Staffing level determined by FAA-ATCS Union contract (7 years)• Shifting ATCS personnel is problematic

– No signaling from Airlines or A&A– Political: Cross-subsidy of GA & Biz jets by Commercial– Absence of “value” of “slots” prevents application of commodity

cycle– Absence of cost of ATC operations for flight prevents application

of commodity cycle



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Opportunities & Challenges

39

Challenges for Sustainability• Systemic changes required

– Provide mechanisms (market-based or other) to balance demand and supply between each layer of network

1. Passenger Demand v. Airline (Seats)• Remove distortions in market-based mechanisms• Adaptive Control Laws = Revenue Management, Fleet

Management2. Airline Flight Schedules v. Airports & Airspace

– Provide mechanism to close-the-loop to manage scarce resources

– Schedule (and control) to departure/route/arrival slots– Collaborative Scheduling

3. Airports & Airspace v. ATC/AOC/TFM– Provide mechanism to close-the-loop to manage scarce

resources– Control to scheduled slots– Collaborative Decision Making

40

G&C Opportunities (1)• Probabilistic Management of Airspace in

the Presence of Weather• Result: Increase Capacity of Airports &

Airspace• Concept of Operations:

– Plan traffic flows based on the probability of availability of airspace

– Keep options open until near last minute– Collaborative Decision Making (CDM) provides means to

equitable manage flow of traffic– Input to CDM “black/white” measures of availability of

airspace– Technology Transition Path

– Extension of existing CDM process

41

G&C Opportunities (2)• Airborne Self-separation

– Enroute, arrivals, and approach/landing• Result: Increase productivity of Air Traffic Management

& Control• Concept of Operations:

– ATM sequences, Aircraft self-separate– All maneuvers

• Multi-vehicle “energy” management problem

• Technology Transition Path– Typically through Experimental Class GA– Not in this case– Must come through UAVs

» Simple case for swarming – lead-follow

42

G&C Opportunities (3)• Contract-based ATC/Required Time of Arrival• Result: Increase productivity of Air Traffic

Management & Control• Concept of Operations:

– ATM sequences and sets RTA– Aircraft manage trajectory

• Technology Transition Path– Typically through Experimental Class GA– Not in this case– Must come through UAVs

» Simple case for swarming – lead-follow

43

G&C Opportunities (4)• Wake Vortex Avoidance (and Encounter

Guidance)• Result: Increase productivity of Air Traffic

Management & Control• Concept of Operations:

– ATM sequences and sets RTA– Aircraft manage trajectory and self-separate

• Technology Transition Path– Typically through Experimental Class GA– UAVs not an option (too small, not jets)– DOD and/or Needs government program

Wake Vortex reduction through aerodynamics

44

G&C Opportunities (5)

• Low Noise/Emission Guidance• Result: Increase Airport & Airspace

Capacity• Concept of Operations:

– Close-loop around noise and emissions• Technology Transition Path

– Typically through Experimental Class GA– UAVs not an option (too small, not jets)– DOD and/or Needs government program



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Thank youQuestions?

Lance Sherry - [email protected], 703-993-1711

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